Wary of geopolitical tumult and eager for their first quiet August in years, some hedge-fund managers scaled back the size and scope of their bets in recent weeks, a pullback that was reflected, say traders, in muted monthly returns.
Across the board, hedge funds were up .5 percent for the month of August, according to numbers compiled by Hedge Fund Research, and up about 2.23 percent for the year.
Those modest, if positive, returns, reflected a decline in the overall appetite for risk, some traders said, after unpredictable central-bank activities,
Now that September has arrived, however, many of those traders may be jumping back in to the fray. “Right now people are starting to put risk back on,” one macro trader said. “Everyone’s hoping to make the year in the next four months.”
A number of the hedge-fund industry’s behemoths — even those that are thriving this year — experienced only fractional returns, doing little to boost their overall 2012 performance. (Read More: Smart Money Looks Less Bright as Hedge Funds Lag S&P.)
The Tudor B.V.I. Global Fund, for instance, was up just .5 percent through the third week of August, according to people familiar with its performance, but up more than 3 percent for the year overall. Maverick Capital Management’s funds, all of which have been on a tear this year after a devastating rout last year, are up roughly 1 percent for the month of August — making the month a fairly small contributor to their more than 20 percent rally year to date, according to someone with knowledge of Maverick’s results.
Despite the fear in the
Meanwhile, funds that have struggled to generate returns this year continued the trend with meager Augusts. Moore Global, the large macro fund, had fallen about .8 percent by the third week of August, according to hedge-fund trackers and someone familiar with the matter, who said final monthly returns haven’t yet been distributed, leaving it up a little less than 1 percent so far this year. Brevan Howard, the enormous macro fund based in Europe, was up roughly 1 percent through late August, according to one hedge fund report, but down about a quarter of a percent for the year during the same period.
-By CNBC's Kate Kelly